Demand Gen Ads: What They Are, When to Use Them

Most Malaysian businesses meet Google Ads through Search. Someone types “aircond service Petaling Jaya”, your ad appears, and you pay for the click. Demand Gen ads work the other way round. They show your images and videos to people scrolling YouTube Shorts, reading Gmail or browsing Discover, before they have typed anything at all.

That makes them powerful, and easy to waste money on. The campaign type now also carries Google’s old Display campaigns, so many advertisers will be pushed into it whether they planned to or not.

This guide from IZI Digital Marketing helps you decide whether Demand Gen fits your business right now, what it needs to work, and how to judge an agency’s plan for it. It supports our guide to choosing an SEM agency in Malaysia, because how an agency handles Demand Gen shows whether it can think beyond keywords. Google’s own short introduction below covers where these ads appear.

PART 1 · DIAGNOSE

What Are Demand Gen Ads?

IN BRIEFDemand Gen ads are a Google Ads campaign type that serves image, video, carousel and product-feed ads on Google’s visual feeds. Instead of keywords, they target audiences such as Lookalike segments, your own customer lists and interests. They sit alongside Search, which our Google Ads management service treats as the intent channel.

Google’s About Demand Gen campaigns page lists where these ads can appear:

• YouTube surfaces: Shorts, in-feed, the Home feed, Watch Next and YouTube search results.
• Discover and Gmail: Google’s Discover content feed and the Gmail inbox.
• Google Display Network: added as Google Display campaigns move into Demand Gen. Eligible advertisers could start migrating in June 2026, and new Display campaigns will later be created only inside Demand Gen.

The key difference from Search is timing. Search captures demand that already exists. Demand Gen tries to create it, by putting a strong visual in front of someone who fits your customer profile but has not started looking. The same Google Ads Help page says the campaign type can reach more than 3 billion monthly users, so the limit is rarely reach. It is usually your creative and your data.

BENCHMARK BRIEFING 1 OF 4

Demand Gen vs Search vs Performance Max: What You Control

IN BRIEFOf Google’s three main campaign types, Demand Gen is the only one that lets you pick both the audience and the channel your ads run on. Performance Max gives the least control. How much you hand to automation is a choice we unpack in AI in Google Ads: what to let it control.

The two bold rows matter most. Demand Gen is the only one of the three where you pick both the audience and the channel. That control helps a business with a clear customer profile. It also means a poor audience choice is your mistake, not the algorithm’s.

PART 2 · DIAGNOSE

When Should You Use Demand Gen Ads?

IN BRIEFUse Demand Gen when your product sells better once people see it, when search volume for your category is thin, or when Search has hit its ceiling. Hold off if you cannot yet track conversions reliably. Our guide to Google Ads conversion tracking with GA4 covers that groundwork.

Most guides describe Demand Gen as “top of funnel” and stop there. That label is true but not useful. A better test is readiness: does your business have what this campaign type feeds on? Five signals say yes.

1. Your product is visual: furniture, food, fashion, property, travel and beauty all sell on sight. A tax advisory firm usually does not.
2. Search demand is thin or maxed out: if you already win most relevant searches, extra budget in Search buys little. Feeds are where new customers still are.
3. You can make video regularly: short vertical clips for Shorts, plus square and landscape versions. One video made once a year is not enough.
4. Conversion tracking already works: Google recommends lighter events such as “add to basket” or site visits for this campaign type, but they still need to be tracked correctly.
5. You have a customer list or site traffic: Lookalike segments start from your past buyers, site visitors or YouTube viewers. With no seed audience, targeting is guesswork.

BENCHMARK BRIEFING 2 OF 4

How Much Budget Do Demand Gen Ads Need?

IN BRIEFGoogle recommends a daily budget of at least 10 times your target CPA. At RM8 per lightweight event that is about RM2,400 a month. At RM120 per sale it is over RM36,000. The event you optimise for sets the budget, a point we cover in why agencies set minimum ad spend requirements.

There is also a hard floor. The Google Ads Developer Blog confirmed that from 1 April 2026, the Google Ads API enforces a minimum of USD 5 a day, or the local-currency equivalent, for Demand Gen campaigns. That floor only lets a campaign exist. It does not make it learn. This is why smaller advertisers often optimise for a lighter event first, then move to leads once volume builds.

PART 3 · DESIGN

Demand Gen vs Performance Max: Which Should You Run?

IN BRIEFChoose Performance Max when you want conversions from every Google channel and are happy to let Google steer. Choose Demand Gen when you want to control who sees your visuals and where. Our Performance Max guide explains when that campaign works and when it doesn’t.

These two overlap on YouTube, Discover and Gmail, so running both without a plan can mean paying twice to reach the same person. Decide by your main goal and your appetite for control.

If you run both, give each its own job and its own reporting line. A clean Google Ads account structure that scales makes that split visible, so you can see which campaign found a customer first.

BENCHMARK BRIEFING 3 OF 4

What Creative Do Demand Gen Ads Need?

IN BRIEFA starter Demand Gen set needs about 14 assets across images, video, a logo and text. A healthy set for three audiences needs around 40, refreshed every few weeks. Creative supply, not budget, is where most small campaigns stall. Our YouTube ads starter guide covers the video side.

Google’s own guidance says more assets raise your chances of good performance, and that image-plus-video campaigns usually beat single-format ones. For a small team, that is the hidden cost. Before you commit budget, check you can produce a fresh batch of visuals every month without stalling other work.

PART 4 · DEPLOY

How to Set Up Your First Demand Gen Campaign

IN BRIEFStart with one goal, one seed audience and one channel mix. Track a conversion the campaign can reach often, budget for learning, and leave it alone long enough to read. The bidding choice follows the logic in our comparison of Smart Bidding strategies for Malaysia.

A first campaign should answer one question clearly. Don’t try to test everything at once. This order keeps the first read clean:

1. Pick one business goal: sales, leads or site visits. Each needs a different conversion event and a different budget.
2. Choose a reachable conversion event: if leads are rare, start with a lighter event such as a key page view, then switch once volume builds.
3. Build a seed audience: upload a customer list or use site visitors, then create a Lookalike segment from it.
4. Choose your channels on purpose: vertical video only? Serve on Shorts only. Strong photos? Discover and Gmail may suit better.
5. Set a budget you can hold: use the 10× target CPA guide above, and commit to it for the full learning period.
6. Leave it alone, then read it: avoid big edits in the first few weeks. Judge results on cost per result and on branded search growth, not clicks alone.

Step six is where most campaigns fail. Owners see a slow first week and change the audience, which restarts learning. Plan how you will spend on Demand Gen alongside other channels, as our look at Google Ads vs Meta Ads for cheaper leads shows.

BENCHMARK BRIEFING 4 OF 4

How Long Do Demand Gen Ads Take to Work? An 8-Week Model

IN BRIEFIn this model, a RM150-a-day lead campaign cuts cost per lead from about RM117 in week one to RM50 by week eight, while branded search rises 18%. Most of the drop happens in the first four weeks, which is why early edits are so costly. The same patience applies to any campaign on YouTube ads.

The branded search column is the one owners forget to watch. Demand Gen often shows its value in Search, when people who saw a Short later search your name. Google reported at Google Marketing Live 2025 that Demand Gen advertisers saw a 26% year-on-year rise in conversions per dollar on average, so the platform is improving. Your own week-four read still decides whether to keep going.

PART 5 · DRIVE

What to Ask an Agency About Demand Gen Ads

IN BRIEFAsk who makes the creative, which conversion event the campaign will optimise for, and how its results will be separated from Search. Put these questions into your digital marketing RFP so every agency answers them the same way.

• “Who produces the videos and images, and how often?” An agency that plans Demand Gen without a creative plan is planning to underperform.
• “Which conversion event will you optimise for first?” Look for an answer tied to your budget, not a default “leads”.
• “How will you stop it overlapping with Performance Max?” They should name roles, audiences or exclusions, not just “Google handles it”.
• “What will you judge it on at week four?” Good answers mention cost per result, branded search and assisted conversions.
• “Are our Display campaigns being migrated?” If you run Display today, ask how the move to Demand Gen will be handled and tested.

The answers tell you whether the agency plans across channels or simply adds a campaign because it is new. That is also what separates a good SEM agency Malaysia businesses can rely on from one that only manages keywords.

THE DECISION

So, Should You Run Demand Gen Ads?

Run Demand Gen ads when you have visual products or services, a steady supply of creative, working conversion tracking and a budget you can hold for at least a month. Wait if any of those is missing, and put the money into Search or remarketing until it is fixed. When you are ready, start narrow: one goal, one seed audience, one clear read at week four.

FAQ

Frequently Asked Questions

1. What are Demand Gen ads in Google Ads?

They are image and video campaigns shown on YouTube, Shorts, Discover, Gmail and the Display Network. It depends on your setup which surfaces you use, because Demand Gen lets you choose channels and target audiences such as Lookalike segments instead of keywords.

2. Is Demand Gen replacing Display campaigns?

Yes, gradually. It depends on your account’s eligibility; Google opened voluntary migration in June 2026 and says new Display campaigns will later be created only inside Demand Gen, with remaining eligible campaigns moved automatically.

3. What is the minimum budget for Demand Gen ads?

USD 5 a day, or the local equivalent, enforced through the Google Ads API since April 2026. It depends on your bidding, though; Google recommends a daily budget of at least 10 times your target CPA, so the practical minimum is usually much higher.

4. Should I use Demand Gen or Performance Max?

Use Performance Max for conversions across all Google channels. It depends on how much control you want; Demand Gen suits businesses that want to choose audiences and channels for visual ads, especially when search demand for their product is still low.

5. Are Demand Gen ads good for small businesses?

Sometimes. It depends on creative supply and tracking; a small business with good video, a customer list and a lighter conversion event can test Demand Gen well, while one without tracking should fix that first.